What is the default risk premium on corporate bond

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Reference no: EM131870953

1. Nesmith Corporation's outstanding bonds have a $1,000 par value, a 11% semiannual coupon, 7 years to maturity, and an 8.5% YTM. What is the bond's price? Round your answer to the nearest cent.

2. A Treasury bond that matures in 10 years has a yield of 4.75%. A 10-year corporate bond has a yield of 8%. Assume that the liquidity premium on the corporate bond is 0.55%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

Reference no: EM131870953

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